Correlation Between Pan Global and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Pan Global and Dow Jones at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Pan Global and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pan Global Resources and Dow Jones Industrial, you can compare the effects of market volatilities on Pan Global and Dow Jones and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Pan Global with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Global and Dow Jones.
Diversification Opportunities for Pan Global and Dow Jones
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pan and Dow is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Pan Global Resources and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Pan Global is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Pan Global Resources are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Pan Global i.e., Pan Global and Dow Jones go up and down completely randomly.
Pair Corralation between Pan Global and Dow Jones
Assuming the 90 days horizon Pan Global Resources is expected to generate 6.25 times more return on investment than Dow Jones. However, Pan Global is 6.25 times more volatile than Dow Jones Industrial. It trades about 0.05 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.1 per unit of risk. If you would invest 8.66 in Pan Global Resources on October 29, 2024 and sell it today you would earn a total of 0.82 from holding Pan Global Resources or generate 9.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.36% |
| Values | Daily Returns |
Pan Global Resources vs. Dow Jones Industrial
Performance |
| Timeline |
Pan Global and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Pan Global Resources
Pair trading matchups for Pan Global
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Pan Global and Dow Jones
The main advantage of trading using opposite Pan Global and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan Global position performs unexpectedly, Dow Jones can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Dow Jones will offset losses from the drop in Dow Jones' long position.| Pan Global vs. Datadog | Pan Global vs. Mattel Inc | Pan Global vs. Tencent Music Entertainment | Pan Global vs. Playtika Holding Corp |
| Dow Jones vs. Lion One Metals | Dow Jones vs. PennantPark Floating Rate | Dow Jones vs. TFI International | Dow Jones vs. United Guardian |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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